Axon (AXON) could be undervalued

I’ve been following Axon for a bit now and just to make sure everyone knows, I absolutely have Axon stock and calls.

Axon essentially makes products and systems for law enforcement and security services. They currently have a couple dozen products, but by far their best selling item is the bodycam. Only about 50% of the police departments in the U.S. currently equip their officers with bodycams and fewer than 5% of security providers do the same. In addition to bodycams, their big offerings are their Taser and fleet camera system (vehicle cameras) There is a ton of money in being the bodycam provider for a PD.

Bodycam cost (just for the unit) ~$650 Uploading/charging station ~$150/cam Technical support ~$330 year/cam Storage cost ~$100 year/cam Evidence backend ~$160 year/cam

Going a step further: Car camera cost (for the unit) ~$1600 Data/storage/support ~$1400 year/vehicle Taser/software/hardware ~$750 year/device

These are basic prices for a mid-sized department. The prices are going to be higher for Big Larry’s Security Service, whose only employee is Big Larry himself, and lower for the NYPD (which is replacing all of their old bodycams with Axon models) with their 35,000 officers. Start throwing in all of the extras which Axon offers and you’re talking big money.

They’ve already brought in about $413 million in the first 6 months of 2021. The contracts are typically for 5 years and the price of poker is going to keep going up.

Their previous 4 quarters they’ve surpassed EPS estimates by 62%, 47%, 180% and 104%

Its current market cap is $11.6 billion. This is with only about half of the country using bodycams as-is.

Bodycams are most likely coming for just about every single police department in America. There’s a chance for serious growth in the security sector as well. Axon’s products integrate together pretty seamlessly and for the most part, once you start using one product, it becomes easier to start using more. I’m not even going to mention international and military possibilities.

State legislatures and city councils are pushing for it and there seems to be pretty broad support. These governments are trying to throw money at bodycam manufacturers, of which Axon is the biggest and best positioned to claim the lion’s share of the market.

Axon looks to be extremely undervalued seeing as they have about 85% of the market share for U.S. bodycams and still have a ton of growth ahead of them. It’s hard to imagine the price governments are going to pay is going to decrease as time goes on, especially since most of the revenue generated by Axon bodycams is on the backend. Once a police department gets bodycams, they aren’t going to get rid of them. It becomes too useful of a tool for accountability both inside and outside of the government. That money has to be thrown somewhere and right now, it looks like at least 85% of it is going to Axon.

This article was written by u/SnooCookies2243.


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